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According to some people, income tax should be done away wit

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Carcass
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According to some people, income tax should be done away wit [#permalink] New post   Updated on: 03 Nov 2023, 04:39
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According to some people, income tax should be done away with in the US since there are several other ways to collect taxes. A few countries in Europe have successfully abolished income taxes by raising other taxes such as sales tax. Of course this makes products more expensive but with the added amount of money you would receive on your paycheck, you will still be better off than you were paying income taxes.


Which of the following, if true, provides the most support for the argument above?

(A) The prices of products in European countries, when converted into US dollars at current rates are very similar to their prices in the United States.
(B) The increase in prices of products because of the increased sales tax rate will not more than offset the benefit of not paying any income taxes.
(C) The legislative body in the United States has stated that it will support the move to abolish income tax.
(D) Apart from increasing sales tax, the government can also increase other special taxes such as those on petroleum products.
(E) The government has enough funds in reserve currently to be able to absorb any shock because of lowered tax collection.

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B

Originally posted by Carcass on 03 Oct 2018, 03:11.
Last edited by Carcass on 03 Nov 2023, 04:39, edited 1 time in total.
Fixed OA
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soenottelling
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Re: According to some people, income tax should be done away wit [#permalink] New post   03 Oct 2018, 15:49
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B is the answer, but it can confuse someone if they don't read it carefully. The arguement is that the added money from your paycheck will have more value than the loss from the increased cost of goods. A doesn't prove anything about this arguement, it merely states that there isn't a confounding factor in the cost of goods between the US and Britain. Useful, but not really what we are looking for in an answer. C, D, and E don't relate to whether or not the paycheck increase will be larger than the costs increase. B says "the increased cost of goods due to increasing sales tax will not be greater than the benefit of the removal of income tax (increase in your take home pay)." This is the same thing we stated the arguement to be, and so it directly supports the arguement by effectively saying "what if the arguement was 100% correct."
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Re: According to some people, income tax should be done away wit [#permalink] New post   01 Jan 2019, 13:07
Choice B addresses the gap between premise and the intermediate conclusion - "you will still be better off than you were paying income taxes." Why? Just because I will get higher pay check? I won't be better off if I had to spend to spend more on sales tax than I would save on income tax. Choice B just states that this is not going to happen.
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Re: According to some people, income tax should be done away wit [#permalink] New post   03 Nov 2023, 04:29
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Carcass - kindly fix the OA please
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According to some people, income tax should be done away wit [#permalink] New post   03 Nov 2023, 04:39
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Official Explanation



The argument concludes that the increase in the prices of products because of an increase in the sales tax rate will not adversely affect the consumers because their salaries will also increase due to the abolition of income tax. However, what if this increase in the prices of products was much more than the increase in people’s salary? Then the situation will negatively impact the people. The argument obviously assumes this will not be the case. B states this and so strengthens the argument.

(A) The situation in European countries has no bearing on the situation in the US.
(B) The correct answer.
(C) This is an additional point and not relevant to the reasoning provided in the argument.
(D) Other taxes are outside the purview of the argument.
(E) The question is not whether the government will be able to bear the shock of abolition of income tax but whether such a move will be beneficial for the people.
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Re: According to some people, income tax should be done away wit [#permalink] New post   03 Nov 2023, 04:39
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Trent wrote:
Carcass - kindly fix the OA please


Thank you sir. Fixed
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